RFL Introduce New Rules On Club Insolvency

Rugby league - 27 Feb 2006

The RFL has introduced new rules relating to professional clubs who undertake acts of insolvency.

Following the agreement of the RFL Council and a change in the sport’s Operational rules, the new regulations will apply at both engage Super League and LHF National League level with immediate effect.

Any club undertaking an act of insolvency will now face an automatic deduction of six competition points.

If the act of insolvency occurs during the season, the deduction will apply with immediate effect. If the insolvency occurs in the close season period, the deduction would apply to the next League campaign.

The RFL’s Director of Finance and Chief Operating Officer, Nigel Wood, said, “Having reviewed the Rules in respect of club insolvency it was widely felt that some punitive measure needed to be imposed on clubs, who it could be argued, had obtained a competitive advantage over their rivals as a consequence of unaffordable overspending. The game unanimously supports the imposition of a points deduction which will address this imbalance”.

Also, in a further proactive step to improve club financial management, all engage Super League and LHF National League clubs will now be required to regularly demonstrate to the RFL that their statutory financial responsibilities are being carried out with due probity.

Wood added: “The new rules are intended to provide an early warning system in respect of clubs falling into arrears with their statutory obligations.

“Whilst these new regulations cannot guarantee that clubs will never again face financial difficulties, at least they provide for the possibility of an earlier intervention.”